-LRB- CNN -RRB- -- It has now been certified officially : Germany is special , at least in the eyes of ratings agency Standard & Poor 's .

According to Standard & Poor 's , Germany is the only country in the eurozone which still deserves the prized AAA rating with a stable outlook . Nine other countries , together accounting for more than half the euro area 's GDP , were downgraded at least one notch . Given that these countries also provide more than half of the financing of the eurozone bail out fund -LRB- the European Financial Stability Facility -RRB- it was only logical that this institution also lost its AAA rating .

One could be tempted , following the downgrades , to conclude that most euro countries just can not get their fiscal houses in order . But the opposite is closer to reality .

The average fiscal deficit for the euro area was only about 4 % of GDP in 2011 . This is projected to fall to about 3 % in 2012 . This is much lower than the double digit figures for the U.S. and UK fiscal deficits for 2011 , which are expected to persist through this year .

Italy -- hit with a two-notch downgrade -- is actually expected to structurally balance its 2012 budget . `` Excessive '' deficits are thus unlikely to be the root cause of the problem -LRB- at least apart from Greece -RRB- . The motivation for the downgrades given by Standard & Poor 's actually cites the excessive attention given to fiscal austerity as one principal reason for the downgrading of a whole swath of euroland .

Greek debt talks to resume

So why the downgrade ? Is there really such a lack of capital that the remaining deficits , which look modest in comparison to other developed countries , can not be financed ?

The answer is surely no . There are enough savings within the monetary union area to finance all public deficits of the eurozone 's members . This is because euro area savers are usually loath to invest in foreign currency ; and most regulated intermediaries such as investment fund have little choice but to invest in government securities in euro .

Further , Europe 's investment funds and insurance companies can not all put their money in a bank account where yields are close to nothing . This is a key reason why reaction in the markets was so muted after the downgrades .

So what is Standard & Poor 's afraid of ? One major problem is Europe 's regional split of savings habits .

Those in the north -- Germany and the Netherlands , for example -- have an excess of savings . But the area 's investors dare not cross the Alps to spend their money in the southern countries such as Italy , Spain and Greece -LRB- and maybe soon France -RRB- .

This is why Italian funding costs have gone up so dramatically while the same time , the German government can collect money from investors when it issues short term paper .

The collection of savings within national pools means the capital markets have ceased to function in the euro area . The European Central Bank is the only institution able to recycle northern European savings through the euro area . The ECB has thus become the `` central counterparty '' to most north-south lending in Europe . By doing so it has prevented a collapse of the banking system . But the ECB has its limits too .

The ECB can not single-handedly substitute for all private cross border lending . The downwards spiral will continue until these markets begin to function again . This should be the main priority of Europe 's leaders . The fiscal compact might be useful to prevent the next crisis a generation down the road , but this will not be very useful if the euro does not survive the present one .

The opinions expressed in this commentary are solely those of Daniel Gros

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Daniel Gros thinks the eurozone 's public finances are still in shape despite downgrades

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Gros regards Europe 's regional split of savings habits as one of the key problems in the crisis

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The European Central Bank has prevented a collapse of the banking system , but it has its limits